1. The Company
Sinopec Corporation is one of the largest integrated energy and chemical companies in China with headquarters in Beijing. It is a well-known brand with an excellent reputation, listed in Hong Kong, Shanghai, New York and London. (Sinopec, Fact Sheet, 2009) Like every Joint Stock company in China, it consists of three main bodies: The shareholders general meeting as the highest authority which appoints the board of directors (executive) which in turn is being inspected by the supervisory board. More detailed information concerning the corporate governance and the organizational structure will be given in Chapter 2. 1.1. History
The gigantic China Petrochemical Corporation Group (Sinopec Group) has been established in 1998 based on the former China Petrochemical Corporation. The Group is completely state-owned and functions as a state-authorized investment organization. (Sinopec-Group, 2011). In February 2000, Sinopec Limited (also named Sinopec Corp., hereinafter referred to as Sinopec) was founded as a majority-owned joint stock company under the state-owned Sinopec Group. The company was simultaneously listed in Hong Kong, New York and London in October 2000. In order to do this, Sinopec has made a total issuance of 16.78 billion H-Shares . The Shanghai listing was completed in July 2001 after issuing 2.8 billion A-Shares in the People’s Republic of China (PRC) and thereby diluting the state-owned stakes from 100 % to just over 64 %. (Sinopec, Our History, 2011) During the next couple of years, Sinopec constantly acquired companies and assets in order to foster its rapid growth. The first takeover took place in August 2001, when Sinopec bought China’s New Star Petroleum Company. Three years later, in 2004, the company acquired chemical assets, catalyst assets and service stations from Sinopec Group. In 2006, Sinopec increased its capital in Hainan Petrochemical Co., Ltd and after completion it held 75% of its equity interests. Later on, the oil production assets as well as five refineries were acquired from Sinopec Group. (Sinopec, Our History, 2011) 1.2. Main business portfolios
To put it briefly, Sinopec operates four main business portfolios.(see image 1) The entering wedge to every aspect of the company’s business is the exploration and production of oil. The department is in charge of the management of oil and gas exploration, production, reserves and assets as well as the marketing of oil and gas (Sinopec, Exploration & Oil Production, 2011). This segment achieves a steady growth; by now, Sinopec is the second largest producer of crude oil and natural gas in China (Sinopec, Fact Sheet, 2009). After having produced the oil, the second business portfolio, namely refining, gets its chance. In fact, Sinopec is the largest oil refiner in China, producing gasoline, diesel, kerosene including jet fuel, fuel oil, chemical feedstock and other petroleum products. After refining, the oil is either sold in service stations (29,000 stations by 2010), which involves marketing and distribution activities, or used to produce chemicals such as ethylene, synthetic resins, monomers and polymers for synthetic fibre and rubbers. Sinopec is the largest producer and distributor of chemical products in China. (Sinopec, Fact Sheet, 2009)
Image 1: Sinopec's main operations
1.3. Products & Services
Overall, Sinopec’s array of products contains nine main products and services. The subsequent graph shows an overview of the portfolio:
Image 2: Products and Services of Sinopec
In the following, only the most important products and services will be outpointed. Namely the service stations, the lubricants and the equipment & materials are further described. The one product everyone in China sees every day is the service stations. Sinopec acclaims the largest nationwide service station network, covering China's cities and countryside, on roads, expressways and waters. The stations offer gasoline, diesel, kerosene,...
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